Are the wealthy fleeing? ‘It all collapsed,’ says businessman who lost millions

Las Vegas man featured in national report shares story of economic downturn

Las Vegas resident Eric Petersen sold this home on Tomiyasu Lane to Treasure Island owner Phil Ruffin for $15 million. The estate boasts more than 71,000 square feet in building space with 18 bedrooms, nine bathrooms, an 11-car garage and 10-stable horse stall.

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Tomiyasu Lane

When Eric Petersen came to Las Vegas from Northern California in his Volkswagen van 20 years ago, he quickly learned it was the land of opportunity.

Calling himself broke in 1991, the now 44-year-old Petersen said he built his wealth into the low nine-figure range. The economic downturn and collapse in the real estate market has cost Petersen 80 percent of his wealth, and he’s had enough.

“I’m not long to lose any more money,” Petersen said Friday. “I’m getting out with some.”

Bought in 2004 for $14 million, Petersen sold his 11-acre estate built by Prince Jefri Bolkiah, brother of the Sultan of Brunei. His sales price was $15 million after it was listed last year at $37.5 million.

The new owner is Treasure Island owner Phil Ruffin, who knows something about buying value. No real estate agent was used in the transaction.

Petersen made his money making referrals to brokers on commercial real estate deals and operated a catalog merchandising company he shuttered in 2008.

“I was in the right place at the right time and made a lot of money in real estate and subprime credit,” Petersen said. “It all collapsed, and I’m recovering as much as I can.”

Petersen liquidated four other residential properties he owned in Las Vegas and has commercial real estate holdings of office and retail-mixed use, plus a hotel he plans to dispose of. He said the decline in real estate values has taken a bite out of his profits.

But it’s his former mansion he bought in 2004 that has gotten public attention. Petersen said it’s costly to maintain and he doesn’t need as much space since he’s been dealing with health issues.

“Before, you could entertain and hold networking parties and do business deals. It was a storefront as much as a place to live, but there’s nothing going on today.”

Since he bought it for $14 million seven years ago, Petersen said he’s put about $20 million into the property to improve it. It has $6 million in landscaping alone, featuring a rose garden with 2,500 to 3,000 roses that blossom each year.

If someone were to replicate the home today, Petersen estimated it would cost $60 million for construction and the land.

The property on Tomiyasu Lane has more than 71,000 square feet in building space with 18 bedrooms, nine bathrooms, an 11-car garage and a 10-stable horse stall. It has an 80-foot-by-40-foot swimming pool, a tennis court, indoor basketball court, gym, sushi bar, disco, formal ballroom and $1 million office.

The mansion is a combined 50,000 square feet with two separate buildings that are connected by an underground tunnel, Petersen said. It has eight structures, including two guesthouses.

Although he has a home in Beverly Hills, Petersen said he plans to buy another house in Las Vegas at some point because of his business interest. He will rent for now.

Petersen said he still loves the city but misses the old Las Vegas.

Casinos no longer make the little guy feel like the big guy, he said. Other trouble on the horizon, Petersen said, is that Macau will have the same effect that riverboats and Native American casinos are having on Las Vegas.

“We have lost our competitive edge because gaming is everywhere, and the American people don’t need to come here to gamble any longer," Petersen said.

With gaming slowing down, Petersen said that will make it more difficult for the Las Vegas economy to recover.

“It’s as overbuilt as a fat lady at the circus is overweight,” Petersen said. “If I had any answer, I would have struck around. I can make my money back elsewhere and faster than sitting in Las Vegas hoping for something to change ... The house is a testament of what happened to Las Vegas. The wealthy are fleeing Las Vegas because nothing is left.”

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Discussion 13 comments

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This guy makes the wealthy sound like parasites, they feed until the host no longer has anything to offer, then move onto to suck another host dry. I'm glad this greedy parasite is leaving Vegas. He's selling hotels and liquidating assets no telling how it affects the community or who is losing their job. I guess his lower 9-figure income just isn't keeping him as secure as it use to. Then again, with a house at 71,000 sq ft it can't be cheap to maintain.

Yes the wealthy are fleeing they have been fleeing for three years now that's what they do. Henry Ford figured this out a long time ago that the middle class must have some wealth in order for the dollar to be past down the line , And today's wealthy think that there is an unlimited amount of money in circulation if Eric and others like him always take and never return then this is what you get a collapse in the system. I have worked for employer's who would not pay above minimum wage because that's all that was required but then they would go and play $1,000.00 a hand at blackjack and lose three times what the payroll was for a year and then want the employee's to come up with a way to save money, I made the suggestion that he quit gambling , It was not received to well.

Your comments are righ on the mark. Las Vegas is being used by people like Eric, taking never giving back and expecting more and then complaining when they cannot get more. Eric mentioned the casinos do not make the little guy feel like the big guy. Things have changed, but the casino are still here, still changing with the times, still hiring, and still in Las Vegas. Unlike people like Eric who run because they can no longer stuck millions out of the Las Vegas housing market. People like Eric are the bottom feeders who are the main cause of the housing market problem, selling subprime mortgages to unqualified applicants.

The casino operators have not packed up and moved out, quitters like Eric and his kind, this is what they do. Maybe we do not have all the facts about Eric and people like him, what is certain, people like Eric are not good for Las Vegas. People like Eric are best to stay out of Las Vegas. Eric and his kind are only here for the good times, and now Eric is perched like a vulture as he waits for another opportunity to feast on the efforts of Casino operators and Casino workers who really are the true building blocks of Las Vegas.

Nothing to complain about. 18 bedrooms? If you google earth the compound it's probably larger than any estate in Las Vegas. Some of these guys were rolling in money like tidal waves without a care in the world that it might not last forever and plan accordingly. Unless you have 12-15 kids who live there all the time, maybe someone can explain the need for 18 bedrooms. This guy sounds greedy and now that the well has been tapped you get the "woe is me" BS.

Wealthy??? MANSIONS???This man belongs in an entirely different kind of living arrangement;like the Crowbar Motel.

vegaslee...and others...point out what The Sun's Wargo fails to...this guy is NASTY, NASTY BUSINESS; he could be THE FACE of THE Las Vegas economic collapse...What a Major-League SCUMBAG.Subprime Mortgages? Telemarketing Scams? Jeez, the MOB had nothing on this kind of "Vegas Elite", ... the MOB took their take from the casinos, not the city's RESIDENTS.

This is the "No PAIN, NO PAIN!" crowd...they NEVER suffer. They just weasel out of their commitments via "strategic defaults" and Bankruptcy laws, and they land VERY, VERY SOFTLY. (ala Don trump)"no pain, no pain!", and off they go to continue sucking the lifeblood out of another unsuspecting group of people.

If the Eric Peterson's are "leaving Las Vegas", WE'RE ALL SAFER FOR IT!

The Scam Artist Capital of the United States of America...Las Vegas, Nevada.

Are you looking to refinance your mortgage? Best way is to contact at least three to five lenders for input on mortgage programs and rates. Also search online for "Mortgage Refinance 123" since refinanced my loan to 3.29% with my OK credit history.

You people who are making nasty comments, don't know Eric. He is a good person, and a good friend of mine. He has helped me when I needed help, without wanting anything in return. You speak badly about him without even knowing him. Try looking at yourself before speaking badly about someone who you don't even know. Don't be so quick to judge someone.